Almost half of company pension scheme members retiring in the next 5 years don’t know how much their pension will be worth, according to a new survey.
Around 44% did not know how much they’d get from their employer’s defined contribution pension scheme. And one in three people saving with a personal pension scheme were equally unsure about how much they’d receive when they retire, according to research by financial services group MetLife Europe.
Many more of those surveyed overestimated the amount they’d receive, with 3% believing that a £100,000 pension fund would produce an annuity of over £15,000 per year, around double what they could actually expect to receive.
Which? says: It is vital to plan ahead for your retirement and to stay informed. You should receive an annual statement with details of your pension pot and your projected pension – make sure you read this letter and, if necessary, seek advice from an Independent Financial Adviser well in advance.
Recent research from Axa shows consumers planning to cut back on paying into their pension as the economic downturn hits pockets. However, saving for a pension comes with valuable tax benefits and the sooner you start planning for retirement the better.
For more information on planning for retirement, see the Which? guide to buying an annuity.